Virrage Images/shutterstock
Virrage Images/shutterstock

It’s not really up for debate. The most consequential mega-donor of 2020 was MacKenzie Scott, whose $6 billion philanthropic debut outclassed even the Bill & Melinda Gates Foundation’s typical annual outlay. And yet, as prodigious as Scott’s giving has been, size isn’t its only distinction. Her grants—an initial batch in July of $1.7 billion, followed by $4.2 billion more in December—won Scott plaudits from philanthropy experts for their unrestricted nature, their attention to structural inequities and the credence they give to her promise to “empty the safe.”

Conducted without a staff-heavy foundation or LLC, Scott’s giving reads as an indictment of a sector that has long justified paternalism and penny pinching, invoking Andrew Carnegie’s old canard that it’s hard to give away lots of money well. As commentators across the board have observed, us included, Scott makes it look quite easy. There’s a lot to like in Scott’s giving, which follows some of the very principles that IP and other critics have been pushing for years now.

Still, grantmaking at Scott’s level demands intense scrutiny. She is, after all, moving sums that rival several government agencies’ budgets, a startling reminder of the inequality that is shaping such fortunes. The sheer quantity of money involved will mold the nonprofit sector in consequential ways, setting recipient organizations on sustainable paths while choosing certain strategies and leadership styles at the expense of others. Like most philanthropy, Scott’s giving subjects itself to nothing like democratic oversight, despite the fact that it’s wading into policy debates and service sectors that arguably affect all Americans—and the world at large.

Perhaps most crucially, Scott’s emergent brand of giving may be a model for what we’ve been calling the “apex donor”—mega-wealthy individuals who eschew typical philanthropic practice even more forcefully than the LLC crowd (Zuckerberg, Omidyar and the like). With Scott in the lead, donors like Jack Dorsey and even Jeff Bezos are moving unheard-of sums quickly and without much infrastructure. If that trend takes off among the nation’s richest, philanthropy will begin to look very different before too long.

With that in mind, it’s worth taking a look at some of the questions and concerns that Scott’s giving brings to the forefrontthings we don’t know, things we should know, and things that have us a little freaked out.

What’s the process?

In a sector accustomed to painstaking application processes and meticulously outlined theories of change, Scott’s grants have arrived without warning, like manna from heaven. Recipients likened her to a “secret Santa,” and in some cases, communications from Scott’s team were so unexpected that they landed at first in spam folders. Her initial $1.7 billion announcement appeared one day, without fanfare, as a modest post on Medium.

In that post and a subsequent $4.2 billion announcement in December of 2020, Scott gave a few hints about the process behind this avalanche of cash. In the fall of 2019, Scott wrote, she “asked a team of nonprofit advisors with key representation from historically marginalized race, gender and sexual identity groups” to help her find organizations to support. That’s about all the information we got back in July 2020, although it later became apparent that at least some of Scott’s advisors work for the Bridgespan Group.

Following that first announcement, Scott consulted her advisors once again to “accelerate” her giving around COVID-19 relief. She went into greater detail on that process in her second announcement, outlining an extensive canvass of “field experts, funders and nonprofit leaders and volunteers” that “included hundreds of emails and phone interviews, and thousands of pages of data analysis on community needs, program outcomes, and each nonprofit’s capacity to absorb and make effective use of funding.”

Apparently, a not-to-be-scoffed-at 6,490 organizations merited a look, and 822 were subject to “deeper research.” The 384 nonprofits that received funding in Scott’s second round made it through a due diligence process that she described as “data-driven and rigorous,” so that “our giving process can be human and soft.”

Scott seems to be taking pains to reassure the field that a bunch of work went into what might otherwise look like a careless giving spree. That is all well and good, but she doesn’t actually detail how that work compares with, say, how a typical program officer might disburse a traditional foundation’s grants. Whereas some foundations take pride in sharing what they’re learning, it’s also unclear whether any of those hundreds of interviews and thousands of pages of data will ever be available for public review.

Scott did not clearly state how much money each grantee received, although some of them volunteered that information themselves. For that matter, it’s also hard to say exactly how this money is moving. This is 501(c)(3) philanthropy, but as of right now, we don’t know whether Scott is using a foundation, some kind of DAF structure, an LLC or some combination of the three. Eventually, of course, more information will come to light via tax records, but Scott shared no explicit legal details in her initial set of announcements.

Finally, there is as yet no way for prospective grantees to inquire about funding or otherwise get on Scott’s radar. Her team will get in touch with you—so long as their message doesn’t get stuck in the spam folder.

Who are these advisors, anyway?

Scott’s team of outside advisors frees her from the hassle of staffing up a big foundation or LLC. The advisors have been crucial to her giving since its inception, shaping who got the initial $1.7 billion and doing the legwork on thousands of prospective grantees. It’s been a full-time job for what must be a fairly large team of professionals, set to continue as long as Scott still has billions to give. (She, ahem, does.)

Aside from the fact that at least some of them come from the Bridgespan Group, the identities and nature of Scott’s team are not known. According to a spokesperson for Bridgespan quoted in the New York Times, the firm is “not in a position to share details about our client’s processes,” adding, “What we can say is that we feel very privileged to get to do this work.”

“Privileged” is a good descriptor. After all, what foundation staffer wouldn’t want to be in these consultants’ shoes, presiding over a smart grantmaking operation that rivals that of the Gates Foundation for size?

It’s difficult at the moment to gauge whether Scott came into her philanthropy with a clear idea of the categories of work she planned to support, or of the way she wanted to give. It is more than possible that her advisory team played a key role in developing the entire picture. The studied breadth of issues, the enlightened granting procedures and the organizational profiles of grantees do bear the imprint of how a moderately forward-looking nonprofit professional might structure their dream giving operation, circa 2020.

If Scott’s mode of giving gains traction among the super-rich, a growing constellation of philanthropy consultants, advisory firms and intermediaries will be in luck. In effect, they may become a kind of massive floating foundation staff, fulfilling many of the roles program officers once monopolized. There is an argument to be made that such a process is already well underway. One consequence might be a stronger set of giving norms that those professionals adhere to in aggregate, promoting better grantmaking in many ways, but also diminishing some of philanthropy’s characteristic diversity of interests and approaches.

How well does Scott’s giving shift power?

Here at Inside Philanthropy, we haven’t been shy about characterizing Scott’s philanthropy as progressive, despite the fact that she doesn’t speak about it that way. From her grants for a “functional democracy” to her unprecedented support for historically Black colleges and universities, Scott clearly shares at least some values with the progressive movement and craves a more equitable country. But beyond her fortune’s Amazon origins and the inherently undemocratic nature of big philanthropy itself, do Scott’s grants represent a true reorientation of power toward grassroots justice leaders and marginalized communities?

Some of them certainly do. From the first set of grants, Southerners on New Ground, the Movement for Black Lives, the Groundswell Fund, and the Fund for Trans Generations are just a few organizations that fit the bill. Scott also gave to One Fair Wage and the National Domestic Workers Alliance—workers’ rights organizations whose missions put them in opposition to the Amazons of the world.

However, a great many of Scott’s grants also fall into the “liberal but not progressive” category, staying well away from the politics-adjacent arenas that many “power shift” progressive groups favor. That’s especially true of many of the service-oriented charities Scott backed in her second round of grants.

Also worth keeping in mind is that Scott isn’t directly backing lots of very small grassroots movement groups (except maybe via regranting through places like the Groundswell Fund or Borealis Philanthropy). She and her team are still paying attention to track records as well as “each nonprofit’s capacity to absorb and make effective use of funding.” A recent Candid analysis of Scott’s second round of grantees found that the vast majority occupy a budgetary middle ground—142 have annual revenues between $1 million and $10 million, and another 199 between $10 million and $100 million. More of Scott’s remaining grantees were large organizations with revenues exceeding that range, than scrappy outfits with budgets below $1 million.

In particular, Scott’s initial climate change giving has favored well-established NGOs. The $125 million she dedicated to that cause in her initial round went to only four organizations: the Nature Conservancy, the Energy Foundation U.S., Energy Foundation China and the European Climate Foundation.

Is this everything?

All the excitement and praise surrounding Scott’s donations has obscured the fact that she didn’t actually need to tell us about them. Disclosing her 2020 grantees via Medium was an entirely voluntary act. She could just as easily have maintained her anonymity for the time being, with no legal repercussions at all.

In such a world, one could imagine word eventually getting around about a mysterious donor granting large sums to nonprofits unused to receiving such massive unrestricted gifts. Scott’s name would probably come out at some point—Chuck Feeney did something similar with Atlantic Philanthropies, giving in secret for years before moving to a more public stance.

The point is that Scott’s choice to go public with her 2020 grantmaking was just that: a choice. It’s possible and even likely that the approximately $6 billion in grants she has described is not the full story, and that other charitable or political contributions we don’t know about originated with Scott. The term “dark money” is a loaded phrase, but it’s still apt—observers have no way of knowing whether Scott or any of her super-rich peers are moving vast sums via non-transparent channels. If anything, that’s a commentary on the shortcomings of tax law rather than a dig on the donors themselves.

What happens when more donors start giving like this?

Chuck Feeney makes for an interesting foil to Scott and her fellow “new apex donors.” Feeney’s grantmaking via Atlantic Philanthropies may have been more conventional, but the fact remains that he is one of that rare breed of Giving Pledgers: a successful one. A multi-billionaire, Feeney managed to empty the safe while the vast majority of Giving Pledge signatories—Gates and Buffett included—saw continual gains to their net worth.

In 2020, MacKenzie Scott took her first steps toward replicating Feeney’s feat on a much larger scale. An annual $6 billion in gifts would most likely lead to a successful spend-down of her personal fortune over time, especially once Amazon’s pandemic-driven gains begin to slow.

But beyond Scott’s giving, which constitutes perhaps the biggest unfolding story in philanthropy right now, an even larger question is who might join her. We’ve already postulated that the lean, large-scale 2020 giving of Jack Dorsey and Jeff Bezos himself may place them in the new apex donor category. But with the fortunes of the very richest growing at absurd rates, it seems like only a matter of time before even more such donors step onto the scene.

As of today, Bezos tops Forbes’ real-time billionaires list, having just edged out Elon Musk, who was for a time the richest person on the planet. Musk’s own philanthropic prospects are still quite hazy, although as they become clearer, it wouldn’t be surprising to see him adopt some version of the apex donor playbook. And then there are people like Larry Page, Sergey Brin, Daniel Gilbert and any number of uber-rich billionaires further down the list who haven’t yet done much in the way of giving. Plus, it’s not unreasonable to expect some established mega-givers to pivot to this approach, at least in part. Mark Zuckerberg and Priscilla Chan did just that with hundreds of millions in election administration funding prior to the 2020 election, all separate from the Chan Zuckerberg Initiative.

Whether or not other multi-billionaires adopt Scott’s approach, her giving alone is simultaneously exciting and troubling to behold. What will it mean for a donor, or multiple donors, to exert such unprecedented sway over America’s social sector? And does giving on a scale large enough to dent or even deplete these outrageous fortunes make up for the extraordinary power that these donors—and their chosen advisors—will wield?

Share